Analyst estimates Apple paid up to $6 billion to settle with Qualcomm

“Apple probably paid Qualcomm between $5 billion and $6 billion to settle the litigation between the two companies, UBS analyst Timothy Arcuri estimated in a note distributed on Thursday,” Kif Leswing reports for CNBC.

“Apple probably also agreed to pay between $8 and $9 in patent royalties per iPhone, estimated UBS, based on Qualcomm’s guidance that it expects earnings per share to increase by $2 as a result of the settlement,” Leswing reports. “The UBS estimate suggests that Apple paid a high price to end a bitter legal battle that spanned multiple continents and threatened Apple’s ability to release a 5G iPhone and put pressure on Qualcomm’s licensing business model that contributes over half of the company’s profit.”

“Since the settlement, Qualcomm stock is up over 38%,” Leswing reports. “Apple shares are 2% higher.”

‘Arcuri wrote that the one-time payment was likely for royalty payments that Apple had stopped paying when the two companies were embroiled in litigation, and that is how it was calculated,” Leswing reports. “If Apple does pay between $8 and $9 in royalties per iPhone it would be a significant increase over the $7.50 in royalties that it previously paid Qualcomm per phone, according to Apple COO Jeff Williams’ testimony in an FTC trial.”

Read more in the full article here.

MacDailyNews Take: Because analysts’ estimates regarding anything and everything to do with Apple have historically proven to be oh-so-accurate.

Qualcomm detente is a bitter pill for Tim Cook; clock is ticking on Apple’s own modem – April 18, 2019
Qualcomm CEO on Apple settlement: We’re not going to disclose how much the deal is worth – April 17, 2019
Here’s what likely happened between Apple, Qualcomm and Intel – April 17, 2019
Intel axes 5G modem plans after Apple and Qualcomm settle – April 17, 2019
After settlement with Apple, Qualcomm still faces other potential legal fallout – April 16, 2019
Qualcomm and Apple settle, agree to drop all litigation – April 16, 2019


      1. No, it’s a very kind “rounding #.” The 6B was for unpaid royalties. Now, instead of Apple paying $7.50 in royalties, the new # will be $8 to $9 per iPhone, Apple would be shelling out more cash than it did before.
        My Cook got thrown into the 10billion+ backseat.

        1. Paying more royalties per iPhone, what a lot of bullshit. Are these analysts really saying that the settlement when so heavily in Qualcomm’s favour, that Apple was really happy to to sign a 6 year contract with an option to extend it 2 years? Give me a break. I’m betting Qualcomm caved farr more than anyone realises. That antitrust case had them scared shitless.

    1. Back in 2017, Barrons estimated that it would cost Apple at least $8bn to settle the suit and resolve the royalties in dispute as of that date. Two years of unpaid royalties further along, Apple paid $5-6bn. That doesn’t sound like a crushing defeat to me.

  1. With the NDA, who knows what the agreement was? It could well be that QUALCOMM caved so their patent portfolio would not be exposed to legal scrutiny that might eliminate some of their patents. Nor might they wish their internal documents to be exposed. Plus they couldn’t risk losing the trial.

    It could be that Apple dumped intel after talks with Q were solidified. Without Apple intel had no game left and exited the project. Apple might have even scored an agreement f

  2. What? Apple settles to pay more, MORE, royalties per iPhone than it paid before the feud? I truly hope this is an unfounded conclusion because the negotiation would have beens as bad as Obama’s surrender to big pharma to produce the very flawed, corporate-centered ACA whose premiums many of my friends can’t afford.

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